Pat Kenny Show on Newstalk 106, featuring Irish Mortgage Brokers

Pat Kenny had Lorcan Sirr from DIT and Karl Deeter from our company on to talk about the property market in particular in light of the changes announced by the Central Bank.

The conversation covered many topics in the market and outlined where so many issues in housing are arising.

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Rising rents will be followed by higher prices.

The lesser discussed problem of rising rents will be the rising prices of the next few years, we see it as a foregone conclusion that price pressure will be upwards as long as rents are rising.

This occurs for several reasons, first is that higher rents compel renters into the purchasing space, those that can move must have sufficient savings and earnings to do so, but equally, those that can afford high rents – and to escape them via a purchase, are exactly the ones who will make that choice.

There is a tricky relationship between rents and prices, but as can be seen from the chart showing the last 25yrs there is some correlation.

What we can see is that often when rents are rising that prices then catch up, at times rents can even be falling and prices still go up – this is perhaps due to the delayed nature of the commitment to a property contract which can be long drawn out.

What you don’t see for long in that chart is rents rising …

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Economic Factors affecting Irish Property Market (part I)

Background: The Irish residential property market has gone from a period of spectacular growth, to a dramatic crash and lately to recovery in the past ten and half years (2005 – 2015) the period I will concentrate on in this article.

The economic factors which influenced these major upheavals are many and varied such as Interest Rates, Unemployment, Population Growth, Demographics, Wage Inflation, Exchange Rates vs Sterling & the US Dollar, Budget Measures, Central Bank borrowing limits, Credit Availability, Rents, Sentiment & Stock Market performance.

This is not an exhaustive list but it does show the range of factors that can influence property price movements with some having a much more dramatic effect than others. Here I will confine my analysis to the influence four key factors played on residential property prices in Ireland during the period discussed.

These are Unemployment, Migration, Exchange Rates & Sentiment. Firstly I will look at the property prices themselves and how they have behaved during the period.

Property Prices:

In the early part of the period under review (2005 to 2007) property prices increased …

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Dublin property prices 2012-2013

This post is a guest blog by a person who doesn’t want to be named.

The two year period between January 2012 and December 2013 was a remarkable period in the movement of the prices of houses and apartments in Dublin. The period started in January 2012 with house prices dropping by -21.7% from a year earlier while apartments dropped slightly less at -18.4% and yet by the end of the period.

In December 2013 house prices were rising by 15.3% annually with apartments rising further to 20.8% annually. Another feature of this period was the manner in which the prices moved, with house prices steadily slowing down their annual decline all through 2012 and from January 2013 to December 2013 having continuous positive increases in annual prices.

However apartment prices showed a lot more volatility over the period entering positive territory in February 2013 when compared to a year earlier but dipping back into negative figures for the next three months with the result that it was June before apartment prices showed increases on the same month a year …

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Irish Times mention Irish Mortgage Brokers in article about renting

We were quoted in a this piece by Aoife Valentine of the Irish Times which was an interesting article about the situation renters face.

When discussing the rising age of first time buyers she quoted us as we mentioned that “this is something that’s become very obvious to mortgage broker Karl Deeter.

“When I started working in lending in around 2003, people in their 20s were borrowing. Nowadays, your typical applicant is no longer 24 to35, they’re 30 to 40,” he says.

New mortgage lending rules issued by the Central Bank in January say that first-time buyers may borrow only 3-and-a-half times their gross annual income, and they must save a 10 per cent deposit on the first €220,000 of the value of the property and a 20 per cent deposit on any higher value.

Deeter believes these rules are now having an effect on who gets on the property ladder.

“What the deposit rules have done is keep people in the rental sector when they otherwise would have been …

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Irish Mortgage Brokers at the inaugural Euromoney Conference

The EuroMoney conference was held for the firs time in Dublin last week and opened by the Minister of Finance Michael Noonan. It had a great line up of speakers including several CEO’s of our largest financial institutions and was an opportunity for professional practitioners to discuss recent developments and many aspects of the market in general.

Karl Deeter was there to represent Irish Mortgage Broker and to take part in the panel discussion on property.

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RTE 1 O’Clock News: Housing crisis and what can be done in the budget to help

Today on the 1 O’clock News on RTE Radio 1 we were asked to consider things which the budget could do to help achieve some stability in the housing market.

We echoed the Construction Industry Federation for a call to end ‘Part V’ contributions as this is a 20% tax levied only on new homes which is meant to provide for social housing. This is a mistake, social housing is a society wide responsibility and should not be put only on the shoulders of new home buyers.

Other ideas included ending development levies and dropping the VAT rate while also being mindful of the rented sector.

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Boom or bubble and will it bust or burst?

This is a piece that Karl wrote for the Irish Sun, it relates to a piece that was the lead story for the paper last week.

(Begins)

There is a lot of talk that we have a ‘property bubble forming’, with virtually no supply, a growing population and a trend towards smaller households as things like separation and divorce become more common, it simply lacks ‘bubble’ qualifications.

But it does have ‘boom’ written all over it, we have had many such booms and busts in Irish history, I have spent much of the last two years researching just this very thing with Frank Quinn from Blackrock College of Further Education.

We have had many price rises and falls in the last 300 years, often we saw that after a crash the next boom would result in overcrowding because back then, as now, supply became ‘short’ in the areas that it was needed.

A boom is about rapid price appreciation, it doesn’t mean you have a bubble. You could have the price of anything boom and there wouldn’t be a bubble, …

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Newstalk: Catastrophic recovery, Lunchtime’s Jonathan Healy speaks to Irish Mortgage Brokers

The idea of a ‘catastrophic recovery’ is one where in getting better there are many victims, we feel that’s an appropriate description for the Irish property market as it bounces back.

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